Should You Add CEG Stock to Your Portfolio After Q4 Earnings Beat?

Core Viewpoint - Constellation Energy Corporation (CEG) reported strong fourth-quarter earnings, driven by favorable nuclear portfolio results and strategic investments in renewable energy, surpassing market expectations consistently over the past year [1][2][20]. Financial Performance - CEG reported fourth-quarter 2024 earnings of $2.44 per share, exceeding the Zacks Consensus Estimate of$2.19 by 11.4% [1] - The company achieved a nuclear operating capacity factor of 94.8% in Q4 2024, ensuring a consistent supply of clean energy [9] - Total operating expenses decreased to $4.48 billion, down 23.6$5.86 billion in the previous year, with operating income at $972 million compared to an operating loss of$67 million in the year-ago quarter [10] Stock Performance - CEG stock closed at $284.44 on February 21, with a 113.5$3 billion and $3.5 billion in capital expenditures for 2025 and 2026, respectively, with 35% allocated for nuclear fuel acquisition [13] - The company entered into a definitive agreement to acquire Calpine Corporation, enhancing its position as a leading competitive retail supplier of clean energy [11] Market Position - CEG's trailing 12-month return on equity stands at 21.96%, significantly higher than the industry average of 8.44%, indicating effective utilization of shareholders' funds [16] - The stock is currently trading at a premium compared to its industry on a forward 12-month P/E basis [18][22] Future Outlook - The company is poised to benefit from the growing demand for clean energy, particularly from AI-driven data centers, with a significant investment from major tech companies expected in the sector [15][20] - CEG has executed a 20-year Power Purchase Agreement (PPA) with Microsoft to support the restart of the Three Mile Island Unit 1, further solidifying its market position [15]